Schroders sees greater volatility ahead

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Futures are now pointing to a nearly flat start today for the Footsie, as investors wait on tomorrow’s US non-farm payrolls data and ahead of today’s Bank of England and European Central Bank policy meetings.

The ECB is on Thursday expected to provide further details of its €1.1trn quantitative easing (QE) programme, which may begin purchases as soon as tomorrow or next Monday. A decision is also expected on the central bank’s ELA financing facility for Greece.

Overnight authorities in Beijing announced a new target for the country’s gross domestic product of around 7%. In parallel, China indicated that government spending will be boosted to underpin the economy’s expansion.

Stocks to watch

The London Stock Exchange saw revenues rise by 32% to £1.28bn in the last financial year, with organic revenues higher by 12% on an organic and constant currency basis. On an adjusted basis profits before tax improved 19% to hit £491.7m. For the full-year the company has proposed a final dividend of 12.8%, an improvement of 6.5% on an equivalent basis.

After a year of senior management change and difficult market conditions, Aggreko saw profits decline 13%, as expected by analysts. For the year ahead, management said incremental mobilisation costs will impact first half results, but overall they currently expect underlying trading profit to be broadly in line with last year.

Schroders reports full year 2014 pre-tax up 16% to £517.1m and assets under management up 14% to £300bn. The group generated net new business of £24.8bn compared to £7.9bn in 2013 due to competitive investment performance across a broad product range and strong distribution. The asset manager is paying a 78p dividend for the year, a 34% increase on 2013. Schroders boss Michael Dobson says that markets may stay resilient in the low interest rate environment, but “we expect to see greater volatility in markets and therefore in investor demand in 2015.”

In the press

The Serious Fraud Office has opened a criminal investigation into the Bank of England over the potential rigging of money market auctions. Confirmation of the inquiry came last night with the central bank already under scrutiny over an earlier investigation into the foreign exchange-rigging scandal. – The Times

China lowered its economic growth forecast to about 7% this year at the opening of the country’s biggest political event of the year, ushering in what leaders have dubbed a “new normal” of slower growth. The move signalled Beijing won’t take dramatic action to raise the growth rate above last year’s level, which at 7.4% was its lowest level in nearly a quarter-century. – The Wall Street Journal Europe

The prime minister is refusing to back down in the row over whether the Russian oligarchs who have bought 13 North Sea oil and gasfields should be allowed to keep them. LetterOne Group, which is backed by Mikhail Fridman and German Khan, paid €5.1bn for RWE’s exploration and production business, including a North Sea presence worth about €1bn. – The Times